Wednesday, 19 November 2014 08:37

Milk payout under pressure

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MILK PAYOUT to Fonterra suppliers is under more pressure after this morning's Global Dairy Trade auction results.

The latest GDT auction result saw the average price index down 3.1% compared to the last auction.

Fonterra's board meets early next month to review the $5.30/kgMS milk payout; a further cut is now almost certain.

In a worrying sign for Fonterra farmers, the price of whole milk powder- the flagship product- was down 5.1% over the previous auction. Skim milk powder price was also down a whopping 5.7%.

Fonterra's current forecast price consists of a $5.30/kgMS milk price and a dividend range of 25 to 35c. For a fully shared up farmer, this translates into a payout of $5.55 to $5.65 for the season. Last season Fonterra paid a record $8.40/kgMS milk price and a dividend of 10c/share.

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